When a druid changes form with wildshape, what happens to the items they were wearing? Have they somehow fused with the wildform, or have been cast aside while shifting, or what?

Thanks!

Weapons and clothing are to the regular form as claws and hide are to the changed form.

So would bonuses on my armor (say +1 to hide) make my whidshape skin be that more adept as well?

Your item bonuses go away.

In the same way that claws and hides bonuses don't get attached to your clothing and weaponry when you're in normal form.